- US-based life insurtech Bestow raised $70 million in Series C funding amid rapid sales growth during the coronavirus pandemic.
- The company launched Protect API to enable partner insurers, agents, and fintechs to integrate its fast underwriting solution on their own platforms.
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US-based Bestow has raised $70 million, per PR Newswire. Launched in 2017, the insurtech's digital platform directly offers term life insurance coverage to consumers. It also launched Protect API in November, which enables partner insurers, agents, and fintechs to integrate its fast underwriting solution on their own platforms.
Bestow has so far sold policies issued by North American Company for Life and Health Insurance, though it will soon also sell policies of its own: It acquired Centurion Life Insurance Company earlier this month to become a nationally licensed carrier.
Bestow's seamless online application process and cheap offering is likely striking a chord with consumers amid the pandemic.
- The insurtech's digital platform is meeting demand for online convenience. Unlike traditional life insurance applications that take weeks and require a doctor's visit or blood test, Bestow's algorithmic underwriting assesses a customer's application information along with external data, such as prescription and financial history, to offer coverage in minutes and entirely online. With the pandemic forcing consumers to stay home, a large share would now prefer to take out insurance digitally—which has likely helped boost Bestow's sales by 450% year over year.
- And its term life insurance product is more accessible for cash-strapped policyholders than permanent coverage. Term life insurance covers the policyholder for a predetermined period and thus tends to be 10 times cheaper than whole life insurance. And while the average term life policy costs more than $15 a month, Bestow's coverage starts at $8 per month for 10–20 years. With 4 in 10 US consumers now being more mindful of their spending, the insurtech's cheap offering is particularly timely.
The perceived high costs and transaction complexities of life insurance will push incumbents to digitize their processes—presenting partnership opportunities for the likes of Bestow. Despite coronavirus health fears, US consumers are no more motivated to take out life insurance than they were last year, citing unaffordability and the complexity of the application process as main barriers—which highlights the inadequacy of existing offerings.
The pandemic has in fact made life insurance sales all the more difficult: Fifty percent of US insurance agents stated that building new customer relationships remotely has been a major challenge amid lockdowns, and life insurance premiums are expected to decline by 6% globally by the end of 2020.
And with insurtech giant Lemonade leveraging its fast AI-powered underwriting to launch its own term life insurance, incumbents risk losing further sales next year. In response, many will likely partner with insurtechs for faster underwriting and an improved customer experience—and Bestow's Protect API provides a seamless way to do so.
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